Digital content promotion q1 2013

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  • 1. DigitalcontentpromotionPOLICY RECOMMENDATION
  • 2. Agenda›TRANSORMATION›PUBLIC POLICY ISSUES›REFORM IMPERATIVES›CONCLUSIONSDIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 2
  • 3. Professional Media Industry- digital transition Content type Expect continued changes in businessAudiovisual conditions TV Film Gaming • Digitization • Miniaturization Audio Radio Recorded • Screens Music • Storage • Processing • Networks • Broadband access Photo • Business models Consumer Newspaper Magazines • Falling transaction costs Academic • Media Convergence Journals • Online behaviors Books Text Function Information Education Entertainment DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 3 Source: The Internet and the Mass Media, Kung, Picard, Towse, 2008
  • 4. The magic trick – newbusiness conditions› The business-trick is to control NOT the copies of your work› but instead a relationship with the customer› that is what customers ultimately want› because they see it as an assurance of a continuing supply› of reliable, user-friendly and timely contentDIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 4
  • 5. What ever can go digitalwill go digitalDIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 5
  • 6. more digital than physicalbooks – highest book growthrates in over 10 years Source: Amazon, Annual Meeting June 2011, http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-presentationsDIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 6
  • 7. The Economist groupExperience – digitization not azero-sum gameDIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 7 Source: The Economist
  • 8. Going digital: NorwegianMusic Industry CASE› Total annual industry revenues grew from 1.4 BNOK to 1.9 BNOK which is + 36%› Number of Music artist increased by + 28%› Per Capita inflation adjusted annual artist income has increased by +66% Source: The Norwegian Music Industry in Age of Digitalization, Bjerke & Sorbro, BI Norwegian School of Management, Oslo 2010DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 8
  • 9. Digitization is what youmake of IT…. Kodak Files for Bankruptcy as Digital Era Spells End to Film (Jan 2012)› The photography pioneer which traces its roots to 1880 that invented: – the first hand-held camera, – held a leading position in film for decades – invented the first digital camera in 1975, which it shelved because it would threaten its lucrative film business› Their history was so important to them, a rich century-old history that generated a lot of money along the way. Now their history has become their liability.DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 9
  • 10. Agenda›TRANSORMATION›PUBLIC POLICY ISSUES›REFORM IMPERATIVES›CONCLUSIONSDIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 10
  • 11. The market supply failureof lawful digital content Source PWC Global Entertainment Outlook 2012DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 11
  • 12. Content ACCESS BARRIERS – copyright not the only barrier› Access barriers are barriers to unhindered consumption of content, the presence of which often results in the personal consumption needs of consumers being unmet.› WIPO identified following access barriers: – Consumer barriers (affordability) – Content exclusivity and limited competition – Deliberate non-availability of content (windowing, territoriality) – Policy and regulatory barriers: › Content regulation World Intellectual Property Organization, Twentieth Session, Geneva June 21 to 24 2011, or DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 12 access: http://www.wipo.int/edocs/mdocs/copyright/en/sccr_20/sccr_20_2_rev.pdf
  • 13. We think: root causes tomarket supply failure 1. Deliberate limited availability of digital content, facilitated by copyright 2. Technology specificity of copyright 3. Unreasonable transaction costsDIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 13
  • 14. We think: Key reformobjectives Promote open and competitive markets in licensed digital content that promote service innovation. With the aim to increase availability of more legitimate digital content at prices which appeal to consumers. Decrease technology specificity of copyright, e.g. exhaustion, exemptions/fair use, safe harbor*. Increase efficiency in licensing by decreasing transaction costs e.g. administrative time and complexity. Reasonable consumer expectations must be met.DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 14 * Not an issue in the EU and the US
  • 15. Agenda›TRANSORMATION›PUBLIC POLICY ISSUES›REFORM IMPERATIVES›CONCLUSIONSDIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 15
  • 16. Increase AvailabilityDIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 16
  • 17. What should a reformdeliver to citizens ? MORE LAWFUL DIGITAL CHOICEBASE: Core 7 markets (US, UK, Sweden, Germany, Spain, China and Taiwan) (Showing those who consider the service worth paying for)Source: Ericsson ConsumerLab TV Video Consumer trends 2011, 2012DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 17
  • 18. FIRST RELEASE WINDOW MUST TOO GO DIGITAL CLOSING THE ANALOGUE CULUTRAL EXCLUSIONDIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 18
  • 19. End User willingness to payfor Theatrical VOD Service EQUIVALENT to the price of TWO CINEMA TICKETS FOR THEATRICAL VOD SERVICE Dont Know Norway 241-275 SEK Denmark Sweden 200-240 SEK 0 10 20 30 40 50 60 70 80 90 Base: All 3 counties, n ~ 2000 per country, age 15 – 65, men/women 50,2/49,8 Source: http://www.filmthinktank.org/DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 19
  • 20. ~ 70% would consume more film At the level of 2x Single Cinema Ticket price WHAT COULD MAKE YOU WATCH MORE MOVIES ON TV? Flexible Showtimes Norway Newer Films Denmark Sweden Better Films 0 10 20 30 40 50 60 70 Base: All 3 counties, n ~ 2000 per country, age 15 – 65, men/women 50,2/49,8 Source: http://www.filmthinktank.org/DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 20
  • 21. Technology Neutral CopyrightDIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 21
  • 22. How many years does it take toassemble the rights necessaryto launch Online service ?› A technology specific approach inevitably leads to inconsistencies and uncertainties as formerly distinct classes of works, rights or media types converge.› The consequences of fragmentation of rights are disturbing in the digital age, as digital technology produces a breakdown and conflation of technology specific works/rights that were meaningful in the analog era.› The transmission of audiovisual content on the Internet now involves making reproductions and public performances of both the recording and its underlying content.› Consequently, the same act can be viewed as a reproduction and distribution of copies on the one hand, and a public performance or display of the work on the other. Since these rights are controlled by different parties and agents, the complexity of the system leads to a gridlock of control that may hinder development. * Source: An Independent Report by Professor Ian Hargreaves, Digital Opportunity, 2011DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 22
  • 23. ..and continue to expectpayment each time….› The current technology specific rights clearing needs to be balanced with realities of the demand side of the digital market.› There is a need to recognize, end users’ actual consumption of content› .. and avoid the cumulative effect of technology specific rights slicing, doubling or tripling the cost of identical content for an identical user and for unaltered right to use.DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 23
  • 24. Any screen – remunerationin digital world› Remuneration based on actual, identifiable consumption based on ; – Download to Own – On-demand (time limited) – One time view› Irrespective of technology – Transmission Technologies – Delivery Networks – Devices – Screens It is unreasonable to potentially triple the cost of identical content, over multiple screens for same userDIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 24
  • 25. Private Storage of legalcontent› The copyright regime and praxis should be applied technology neutrally, e.g. independently of any physical storage, architecture and media format.› Any storage solution architecture e.g. if the storage function is embedded in a local consumer device or in a network should be able to compete freely.› Notably, PVR and private cloud have the same functions and should not be discriminated by law or require special consent from rights holders.DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 25
  • 26. DIMENSIONS OF availability› Territoriality > Timed availability across nations› Territoriality and place shifting > Follow me› Territoriality and long tail – regional/global niches› Time and Timing > windowing and exclusive licensing› Time, place and format shifting – at home and on the go› Range of choice > depth and width of catalogue› A’ la carte > Freedom to choose (my content) and timing (my time) and screen (my screen)HOW ABOUT AN “AWATAD” RIGHT ? DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 26
  • 27. Ultimately we end up withthe question of exhaustion› “The first sale principle of the original of a work or copies thereof by the right-holder or with his consent in the Community, exhausts the right to control the release in the Community of a work incorporated in a tangible tool”› The paradox of “tangible” exhaustions ; in a legislative measure such as the EU INFOSOC DIRECTIVE which was devoted to the online context, the only purpose of market integration was confined to the offline context.*› Creators should be able to freely exercise their right to or not to exhaust – BUT why should digital be discriminated once “analogue” free choice to exhaust has been made? * Source: EU Study, Legal Analysis of a Single Market for the Information Society October 2009DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 27
  • 28. SIMPLIFY & DECREASE TRANSACTION COSTSDIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 28
  • 29. Transaction costs › Simplify current state of (indirect) licensing play › Decrease fragmentation of rights, rights owners and licensing practices with the aim to: › Increase availability and decrease effort – nationally: One-Stop-Shop, Digital Copyright Exchange, etc › Decrease effort cross border, simplify cross-border licensing, collective rights management › Regulate natural and/or legal monopolies > efficient and transparent collective rights- managementDIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 29
  • 30. REASONABLE CONSUMER EXPECTATIONS EXCEPTIONS TIME PLACE DEVICE SHIFTING MUST BE METDIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 30
  • 31. we think – reasonableexpectations – Must beaccommodated› Lawful content In combination with a legal› Time shifting system that promotes› Device shifting availability of› Place shifting digital licensed content and› Private sphere efficient licensing DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 31
  • 32. legal attractive digital services can compete with and Displace “Free”DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 32
  • 33. Displace “free” with lawfuldigital services ! Spain Base: Spanish on-demand (streaming & downloading content) users (513 users out of 1000) New & old content Attractive pricing User friendly & simple US 60% 50% 2011 40% 2012 30% 20% 10% 0% Other File sharing Apple iTunes Amazon Instant Operator On- TV Network Hulu Netflix Video demand homepage Base: US on-demand (streaming & downloading content) users (591 users out of 1000)BASE: Spain & US [On-demand users that watch streamed or downloaded video content at least several times per month]Source: Ericsson ConsumerLab TV Video Consumer trends 2011 & 2012DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 33
  • 34. enforcement alone is not anadequate response› Such research as exists indicates that we should be wary of expecting tougher enforcement alone to solve the problem of copyright infringement.› Instead, Government should respond in four ways: – by modernizing copyright law; – through education; – through enforcement› and by doing all it can to encourage open and competitive markets in licensed digital content, which will result in more legitimate digital content at prices which appeal to consumers Source: An Independent Report by Professor Ian Hargreaves, Digital Opportunity, 2011DIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 34
  • 35. we agree with - RIAAstatement 1 Dec. 2011 “To be clear, no legal efforts are a panacea — compelling legal consumption options are the most important” Source: The Tennessean, 1 December 2011, RIAA largely succeeds in goal of bringing piracy under controlDIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 35
  • 36. Agenda›TRANSORMATION›PUBLIC POLICY ISSUES›REFORM IMPERATIVES›CONCLUSIONSDIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 36
  • 37. conclusions Increasing availability of lawful digital content Technology neutral copyright More efficient rights clearing Reasonable end user expectations must be accommodatedDIGITAL CONTENT PROMOTION | Public | © Ericsson AB 2012 | 2012-10-30 | Page 37